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Strategies & Market Trends : The Epic American Credit and Bond Bubble Laboratory -- Ignore unavailable to you. Want to Upgrade?

To: Little Joe who wrote (5889)	1/22/2004 11:12:31 PM
From: mishedlo	Read Replies (1) \| Respond to of 110194

It will eventually, but I think, only after inflation so severe that the pain of deflation will be acceptable. 100% ass backwards IMO M

To: Little Joe who wrote (5889)	1/22/2004 11:27:22 PM
From: gregor_us	Read Replies (4) \| Respond to of 110194

Little Joe: My thoughts today are that Deflation will come first, and the Inflation will come later. We're in a very wierd mixture, however. The Bears (the gold bugs and fed watchers and debt worriers like us), along with the bulls(the SP500 boys and the reflation crowd)--are all convinced history will repeat itself like some perfect duplicate of the past. But I wonder that we'll see something new, and fresh. A twist. I wonder that we will roll between a deflation fighting policy--which spurs reflation activity and harkens future inflation--to deflationary levels of debt accumulation, which are an outgrowth of the deflation fighting policy--which then harkens future demand collapse--thus starting the deflation fighting policy cycle all over again. I suspect very strongly that this Economy, firstly, is about to get a wake-up call about slackening, consumer demand. It's going to get people scurrying back to their models, and predictions. This may be a classic reflationary Economy--weak in its foundations but flush with liquidity--not producing jobs, but producing lots asset management activty. Some are calling it an Asset Economy. Maybe we will indeed get the Inflation first. If we do? I think it will be rolling, small inflation, which will beget policy that tips us back towards Deflation. But I am being too general here, not specific enough.